This invention relates to the issuing or dispensing of stored value smart chip cards from stand alone terminals that may be located in airports, arcades, shops, shopping malls and in places where the public may purchase these cards using cash or a credit card. Although there are a number of card dispensers on the market there are none that actually encode a smart chip card as it is being dispensed. There are two basic types of smart card. The simplest is the memory or stored value card which is frequently a disposable magnetic strip card. The more complex smart card employs an integrated circuit and is basically a "PC on a card". Due to its security, these are used as credit cards replacing the magnetic strip card.
Currently available telephone card dispensers issue stored value cards. The user must call a central facility to activate the card by its serial number which is sometimes referred to as "encoding before issue". These cards can be time consuming and inconvenient to use.
The smart card was invented by the French company Innovatron in 1974 but was not widely used until the mid 1980's. It is basically a credit card size plastic card with one or more microchips embedded in it. They come in two basic types; first the memory chip card which stores a number of units of value. As the card is used, the units are burned off the chip until they are all used up, then the card is thrown away. The second type is a reprogrammable microprocessor card, or "PC on a card". The price of the card varies depending on the amount and type of memory it contains. Motorola, SGS Thomson and Siemens are the main chip manufacturers.
Pre-paid smart cards are widely accepted in banking and telephone applications in about every country in the world except the U.S.A. However, that is rapidly changing. One of the catalysts was the 1996 Olympics, with Visa, M/C and major banks rushing to place smart cards into service. The telephone industry is also installing smart card phones across the U.S.A.
In 1993, the U.S. phone companies introduced the "dial 800" pre-paid telephone card to test the acceptance of debit cards. The "800" card has the advantage of being useable from any existing telephone, but has the disadvantage that the user has to dial many digits, i.e. the 800 number, a pin number followed by the number you wanted to dial in the first place. The user's debit account is stored in a central computer owned by the phone company. In contrast, the "smart chip card" contains the account on the card and is much easier to use and has proved to be very secure since the smart card uses a crytogram. With many powerful PC's now available, magnetic cards are easy to duplicate and will likely soon disappear from all applications requiring transaction security, such as credit cards.
With the volume of cards in use increasing there is a need for more secure methods for issuing or dispensing cards, whether they are smart cards or magnetic cards. Also, a more convenient manner of dispensing and activating cards is required. Vending machines are presently available which issue uncoded cards. The user must then insert this card in a separate receptacle and code it for a desired value. This can be extremely annoying and confusing, particularly if the user is in a hurry or speaks a foreign language. If the user removes the card but neglects to activate it, the card will be inoperable and the user may be frustrated or inconvenienced.
The present invention is not only a dispenser of cards, but also includes the capability to add value to a card already purchased. There is a read/write head in the reader that performs the encoding of each card so that the cards have no value while they are released from the dispenser. Since the apparatus accepts currency, the enclosure or case is made of high security double plated stainless steel with a triple locking mechanism that is drill proof.